Congressmen made millions via "legal" graft and insider trading reveals 60 Minutes sting

What the famed “60 Minutes” TV show does best is exposing crimes happening in plain sight; such as House Speaker John Boehner and others in Congress who made millions with former “legal” insider trading deals.

It was not pretty seeing Republican House Speaker John Boehner, 62, squirming after CBS News “60 Minutes” reporter Steve Kroft asked him if he’s made millions from insider trading deals - that this special June 17 "60 Minutes" TV report updated from previously exposing so-called “legal” corruption in Congress. At the same time, this 60 Minutes report from Sunday night stated: “John Boehner may have benefited from stock purchases based on non-public information.” For instance, Kroft told Speaker Boehner: “You made a number of trades going back to the health care debate. You bought some insurance stock. Did you make those trades based on non-public information?” In turn, Boehner said: “I have not made any decisions on day-to-day trading activities in my account. And haven't for years. I don't - I do not do it, haven't done it and wouldn't do it.” Later Boehner's spokesman told “60 Minutes” “that the health care trades were made by the speaker's financial adviser, who he only consults with about once a year.”

60 Minutes still making lawmakers squirm

The CBS News program “60 Minutes” – that’s been a staple on Sunday evenings for 36 years; since reporters such as the late Mike Wallace started on this news magazine, which was created in 1968 with the mandate of asking tough questions “without censorship." In turn, Wallace once said on 60 Minutes that “censorship reflects a society’s lack of confidence in itself.”

Thus, 60 Minutes reporter Steve Kroft was able to ask Speaker Boehner those tough questions on Father’s Day about how he got so rich as a member of Congress.

In turn, “60 Minutes” has been ranked No. 6 on TV Guide’s “50 Greatest TV Shows of All Time.”

At the same time, what 60 Minutes does so good is reveal to the American public who’s cheating who and why?

For instance, thanks to a new viewer service called “60 Minutes Overtime,” viewers of Sunday evening's interview with Speaker Boehner and other members of Congress – who once made big bucks with “legal” insider trading - can get more details by going to the 60 Minutes website for free re-broadcasts of previous programming, such as this recent Sunday evening show and more follow-up reports at cbsnews.com.

Also, “60 Minutes Overtime” includes insider trading background – from previous TV reports - on why Kroft questioned both Speaker Boehner and
Congresswoman Nancy Pelosi on how they may have benefited from stock purchases based on “non-public information they’d received.”

Boehner the rich man third in line for president

As the current Speaker of the U.S. House of Representatives, Boehner is second in line to the presidency of the United States following the vice president in accordance with the Presidential Succession Act. Thus, 60 Minutes justified asking Speaker Boehner these tough questions about how he’s gotten so very rich as a member of Congress?

To help explain why this sort of legal graft went on for so long in Congress before President Obama put the kibosh on it, 60 Minutes asked Brian Baird who is a former congressman from Washington State who served six terms in the house before retiring last year. “He spent half of those 12 years trying to get his colleagues to prohibit insider trading in Congress and establish some rules governing conflicts of interest.”

In turn, Baird told 60 Minutes: “One line in a bill in Congress can be worth millions and millions of dollars. There was one night, we had a late, late night caucus and you could kind of tell how a vote was going to go the next day. I literally walked home and I thought, 'Man, if you - if you went online and made - some significant trades, you could make a lot of money on this.' You-- you could just see it. You could see the potential here.”

Also, in 2004, Baird and Congresswoman Louise Slaughter introduced “the Stock Act” which would make it illegal for members of Congress to trade stocks on non-public information and require them to report their stock trades every 90 days instead of once a year.

The reason for introducing this “Stock Act,” states 60 Minutes” is because over “the past few years a whole new totally unregulated, $100 million dollar industry has grown up in Washington called political intelligence. It employs former congressmen and former staffers to scour the halls of the Capitol gathering valuable non-public information then selling it to hedge funds and traders on Wall Street who can trade on it.”

Clever members of Congress made legal “insider” deals

Baird also told 60 Minutes that “if you're a political intel guy, and you get that information long before it's public; long before somebody wakes up the next morning and reads or watches the television or whatever, you've got it. And you can make real-- real-time trades before anybody else.”

He also says “its taken what would be a criminal enterprise anyplace else in the country and turned it into a profitable business model.”

Moreover, Baird told 60 Minutes how: “The town is all about people saying-- what do you know that I don't know. This is the currency of Washington, D.C. And it's that kind of informational currency that translates into real currency. Maybe it's over drinks maybe somebody picks up a phone. And says you know just to let you know it's in the bill. Trades happen. Can't trace 'em. If you can trace 'em, it's not illegal. It's a pretty great system. You feel like an idiot to not take advantage of it.”

Also, following a previous 60 Minutes report on how members of Congress are taking advantage of this “legal graft,” it reported how “more than 284 members of the House signed up to co-sponsor the Stock Act. It passed the House and Senate and was signed into law by the president in April.” However, there are still provisions where these sneaky congressmen and women can turn a legal buck, 60 Minutes reporter Kroft added.

As for updating this “fact” that most Americans may not be aware of, Kroft explained the hassle of trying to get these lawmakers to tell voters the truth.

Lawmakers keep silent when busted

"Nobody would talk to us." That's what 60 Minutes correspondent Kroft says happened when he tried to get members of Congress to talk about "insider trading" on Capitol Hill.

For instance, back in November, when 60 Minutes aired “Insiders,” it was illegal for member of Congress to make stock trades using inside information they learn while working on legislation. Kroft had some questions about unsavory-seeming stock trades by lawmakers, but unsurprisingly nobody would give him an interview.”

Insider trading in Congress was legal when our piece "Insiders" was first broadcast in November, added Kroft who updated "Insiders" June 17 by trying to get Boehner and other members of Congress to admit they made "legal millions" thanks to an insider loophole they created and then passed in Congress.

As Kroft reported, members of Congress could use non-public information - gathered in the course of their work on the Hill - to make stock trades, and there appeared to be very little will to change that. After the 60 Minutes report aired, all that changed.

In January, President Barack Obama called for reform during his State of the Union address, and sponsorship for the Stock Act, which had been minimal in the past, took off. In April, 60 Minutes reported how “the Stock Act was signed into law.”

Image source of Congressman John Boehner introducing then-president George W. Bush in Troy, Ohio in 2003. Boehner would not explain how he’s gotten so rich as a member of Congress during a June 17 “60 Minutes” interview. Photo courtesy Wikipedia http://en.wikipedia.org/wiki/John_Boehner

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